Last Updated: 22nd May, 2024

Are you looking to obtain finance for your family trust? Some lenders treat trust loans differently to standard residential loans!

Read on to find out if your circumstances qualify for a family trust loan.

How much can I borrow?

The amount that you can borrow depends on the loan product that you require:

  • Investment loans: 95% of the property value.
  • Low doc (no income evidence): 80% of the property value.
  • Discounts: Competitive professional package and basic loan discounts are available.

Low doc family trust loans are only available from a few select lenders. Please discuss this with us before you begin looking for a property to buy.

Some lenders have restrictions on lending to family trusts with a company as the trustee, but can accept trusts with a personal trustee.

Do you want to obtain finance for your family trust? Please enquire online or contact us on 1300 889 743 to speak to a specialist mortgage broker who can help you get your loan approved.

How do banks view family trusts?

Banks view family trusts in the same way as they view discretionary trusts and almost half of the Australian lenders will decline loans for discretionary trusts.

Many will instead refer you to their business banking department who will then charge a higher rate and additional fees.

We have mortgage brokers that specialise in family trust lending and can find a lender to approve your mortgage with a normal residential loan with professional package discounts.

How can we help?

We can help you by looking at your entire situation and finding a bank that will lend to a trust.

  • We know which lenders will approve loans for family trusts.
  • We know which lenders can accept family trust loans without the need for beneficiaries to be guarantors.
  • We can get your loan approved with lenders that have fewer fees for guarantee & indemnity documents.
  • We know how to structure loans with the correct entities as borrowers and mortgagors. We’ll even discuss this with your accountant to be 100% sure.
  • For the majority of family trust loans our services are completely free!

Simply call 1300 889 743 or compelte our free online assessment form.

The beneficiary problem

Property investors often see their accountant, setup their trust, then go to their bank to get a pre-approval for a loan.

A problem then arises as most banks want all of adult beneficiaries to be guarantors for the loan!

This means that in order to get a loan, they must put their son, daughter, spouse, a friend, parents & any other beneficiaries on the loan. Without doing so, their loan application will not be approved.

They would all need to provide income, asset & liability details as well have meet other borrowing criteria.

This becomes incredibly cumbersome, and of course many beneficiaries do not want to be personally responsible for the family trust’s loan.

The solution?

Not every lender requires beneficiaries to be guarantors!

The secret is to apply with a flexible lender that has competitive pricing and a reasonable policy regarding guarantees from beneficiaries.

To find a lender that will approve your loan and offer you the best interest rates around, please enquire online or call us on 1300 889 743 and one of our mortgage brokers will help you to find the best solution for your situation.

Which banks can approve loans for family trusts?

Unfortunately it is not as simple as knowing which lenders will consider loans for family trusts.

Lenders are constantly updating their guidelines for both family trust loans and family trust low doc loans.

However, we know over 40 accredited major banks and non-conforming lenders.

We can help you pick a lender that has flexible lending guidelines and a loan package that suits your needs.

What is a family trust?

Family trusts are a type of discretionary trust where the beneficiaries of the trust are all related. For this reason they are often referred to as a “family discretionary trust”.

Just like with a discretionary trust, the trustee can distribute income to various family members, as they see fit.

What are the benefits of a family trust?

Since, a family trust is like a discretionary trust, the income and profits from the trust can be distributed to the children or young adults that have lower taxable incomes.

Discretionary trusts are also used to assist protect assets in the event that one of the family members has a business failure or marriage breakdown.

Some families use a family trust as a method of passing assets to future generations.

Speak to our mortgage brokers

Do you need the help of an expert mortgage broker? Our brokers are trained to handle trusts and understand what it is you are looking for!

Please contact us on 1300 889 743 or enquire online and one of our mortgage brokers will help you select the best lender around and apply for a home loan.